How A SWOT Analysis Helps You Plan More Effectively
Wed, 05/15/2013 - 11:41am | by Helen Hoart
When it’s time to develop a plan whether it’s for business or your personal life one technique that can help in planning next steps is a SWOT analysis.
SWOT is the acronym for Strengths, Weaknesses, Opportunities and Threats. Many businesses use SWOT analysis as the beginning step in strategic planning.
The key steps in conducting a SWOT analysis include:
Brainstorming: whether you’re doing this with a group or by yourself, list strengths, weaknesses, opportunities and threats. Make a list under each category. Think of as many as you can.
Strengths and weaknesses are internal. An example of strength for a company would be #1 brand in the marketplace. A weakness would be delay in delivering product. For an individual strength could be excellent communication skills. A weakness could be poor computer skills. Remember to keep the focus internal for strengths and weaknesses.
Opportunities and threats are external. If you are working on a SWOT analysis for your business, here are examples of opportunities and threats. Opportunity: a competitor has left the market. Threat: another competitor unveiled its new website with more products and an enhanced shopping cart.
On a personal level, an opportunity could be a company with jobs in your field is moving into your area. A threat could be the reverse—an economic contraction causing jobs you’re qualified for to leave the area.
Take the laundry-list of ideas within each category and reduce them to the top 5 to 10 ideas per category.
Review each category separately and consider each of these ideas and the potential implications.
Remember that the idea with SWOT analysis is to gain a better understanding of how your organization or you can relate to the external environment. As such, the next step is to look at the internal strengths and weaknesses and see how they relate to the opportunities and threats.
The final step is to look at the following areas:
a. Those factors that represent both strengths and opportunities in the external environment. This represents a potential area for growth.
b. Those factors that represent weaknesses and threats in the external environment. This represents an area that needs to be addressed.